Report: Workers lose out on estimated $15B due to poor state minimum-wage enforcement
- Minimum-wage laws are handicapped by poor enforcement across the U.S., a nine-month investigation by Politico revealed. In interviews with several state officials, labor specialists and legal-services advocates, the news organization says six states have no investigators to look into reported minimum-wage violations and 26 other states have fewer than 10 investigators.
- The problem is causing affected workers to lose out on an estimated $15 billion in wages, according to Politico. Few cases are reported, and employees who successfully fight their employers often don't get back the full amount of lost wages. A Politico survey of 15 states found that 41% of the wages that states order employers to pay workers aren't recovered.
- All six of the states with no minimum-wage investigators are located in the South; employees in these states claiming infractions must appeal to the U.S. Department of Labor (DOL), "which takes cases only selectively," Politico said.
Politico's report is a wake-up call to the employment law community. Several states have joined a nationwide trend to pass new minimum-wage laws, but those measures are a waste without proper enforcement, and affected workers are essentially the victims of theft.
Among the issues faced by DOL's Wage and Hour Division, minimum wage draws particularly strong political debate but is not one on which the Trump administration has taken significant action. Instead, state governments have led the way, enacting new laws and creating a patchwork situation for employers in the process.
But a lack of enforcement also makes an already uncertain patchwork situation even more confusing, as compliance mechanisms aren't clear in every state. That so few investigators are operating in over half of states hinders other measures taken by the DOL, including raising penalties for violating minimum-wage laws.